How to Build Mobile Home Equity

Even simple improvements can help build equity in a mobile home..

Like stick-built homes, mobile homes can build equity. The equity in your home is the difference between how much the home is worth and how much money you still owe on it. Making improvements to the property or paying down the principal you owe on your personal property or mortgage loan are among the strategies to increase the home’s value and builds equity faster.

1

Purchase land on which to locate your mobile home. Owning the land increases its value as will the size and location of the lot and the condition of the streets and other homes in the neighborhood.

2

Affix the mobile home to a permanent foundation. Generally, a permanent foundation involves installing metal anchor straps and masonry block piers with poured concrete footings at key structural points underneath the mobile home. A masonry block foundation wall provides additional structural support. The wheels, axles and tow hitch must be removed for lenders to consider the home as permanently installed.

3

Keep your mobile home well maintained. Neglecting to make necessary repairs over time will depreciate its value. Repair or replace a worn or damaged roof, windows and rain gutters. Improvements such as upgrading outdated appliances, the kitchen, bathrooms and plumbing and electrical systems also add value.

4

Make improvements that will increase the home’s value. Landscaping and constructing other buildings and structures on the property such as a deck, enclosed porch, driveway, carport or garage, walkways and a storage shed add to a home’s value.

5

Reduce the principal balance on the loan; as the principal on your mortgage loan decrease, the equity in your home increases. There are several ways to do so. Pay extra on your monthly payments, make at least one additional payment each year, apply a one-time large lump sum payment or make smaller annual lump-sum payments. Read your loan documents first to see if the lender specifies a maximum amount you are allowed to prepay each year without having to pay a prepayment penalty. Make sure you advise your lender in writing that the extra money is to be applied toward the principal balance.

6

Refinance your home loan to a shorter term. Your monthly payment will be higher but you will pay off the loan sooner, building equity at a faster rate.

About the Author

Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.